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TORTS - EXEMPLARY  RE: NO ER-EE RELATIONSHIP  CORRECT.

The employment contract was PERFECTED


upon signing BUT it DID NOT COMMENCE since the stipulation that it will commence
BRIGHT MARITIME CORPORATION (BMC)/DESIREE P. G.R. No. 165935 upon departure is valid.
TENORIO, Petitioners, - versus - RICARDO B. FANTONIAL,  NEVERTHELESS, even if no ER-EE relationship yet, contemporaneous with the
Respondent. Promulgated: perfection of the employment contract was the birth of certain rights and obligations,
February 8, 2012 the breach of which may give rise to a cause of action against the erring party. If the
x-----------------------------------------------------------------------------------------x reverse happened, that is, the seafarer failed or refused to be deployed as agreed
upon, he would be liable for damages. BMC failed to prove with substantial evidence
DIGEST that they had a valid ground to prevent respondent from leaving on the scheduled date
Hi guys super konti lang discussion about exemplary dmgs to isasama ko na ibang discussion sa of his deployment.
case baka itanong ni mam.  BMC’s act constitutes BREACH OF CONTRACT making it liable for actual damages
FACTS: (wages) for the loss of the salary. Also liable for EXEMPLARY DAMAGES (50K) which are
 Contract of employment was executed by BMC (manning agent, for Ranger Marine) imposed by way of example or correction for the public good in view of BMC’s act of
and Fantonial duly approved by POEA. preventing Fantonial from being deployed on the ground that he was not yet declared
 Fantonial was made to undergo a medical examination at a medical clinic CMC fit to work on the date of his departure, despite evidence to the contrary. Such act, if
accredited by BMC. His med cert was stamped FIT TO WORK. tolerated, would prejudice the employment opportunities of our seafarers who are
 Fantonial was instructed to go to NAIA for departure where a liaison officer of BMC will qualified to be deployed, but prevented to do so by a manning agency for unjustified
give his ticket to him. Upon meeting the officer, Fantonial was told that he will not be reasons. Exemplary damages are imposed not to enrich one party or impoverish
able to depart that day since there were some defects in his med cert and was asked another, but to serve as a deterrent against or as a negative incentive to curb socially
to go back to the hospital CMC. deleterious actions.
 When Fantonial went back to CMC, the examining physician told him that there was
nothing wrong nor irregular with his med cert. Fantonial went to BMC’s office to clarify DECISION
but BMC told him to wait for their call. BMC never called. Fantonial filed a complaint PERALTA, J.:
for illegal dismissal praying for payment of salaries, actual, moral, exemplary damages
as well as attys fees. This is a petition for review on certiorari[1] of the Decision of the Court of Appeals in CA-G.R. SP
 LA: granted but backwages only, other claims dismissed. NLRC: reversed LA and No. 67571, dated October 25, 2004, reversing and setting aside the Decision of the National Labor
dismissed the case. CA: IFO Fantonial, awarded backwages, exemplary and moral Relations Commission (NLRC), and reinstating the Decision of the Labor Arbiter finding that
damages respondent Ricardo B. Fantonial was illegally dismissed, but the Court of Appeals modified the
 BMC DEFENSES: award of damages.
1) Preventing Fantonial from leaving for work is justified since his Hepa B examination
results were only released on Jan 21 and was only declared FIT TO WORK on that date, The facts are as follows:
although his med cert was already stamped with the words FIT TO WORK on Jan 17
(which was the date Fantonial was initially examined). Hence, he could not leave for On January 15, 2000, a Contract of Employment[2] was executed by petitioner Bright Maritime
work in Jan 17 since he was not yet declared fit to work at that time and could not leave Corporation (BMC), a manning agent, and its president, petitioner Desiree P. Tenorio, for and in
on a later date since the vessel has already left. behalf of their principal, Ranger Marine S.A., and respondent Ricardo B. Fantonial, which contract
2) No ER-EE relationship yet since the contract provided that it shall commence AFTER was verified and approved by the Philippine Overseas Employment Administration (POEA) on
departure January 17, 2000. The employment contract provided that respondent shall be employed as
ISSUE: WON Fantonial should be granted the backwages and damages boatswain of the foreign vessel M/V AUK for one year, with a basic monthly salary of US$450,
RULING: YES. plus an allowance of US$220. The contract also provided for a 90 hours per month of overtime
 RE: NOT FIT TO WORK CONTENTION  NOT a valid reason to prevent Fantonial from with pay and a vacation leave with pay of US$45 per month.
leaving for work. The contention was preposterous since the Medical Certificate dated
January 17, stamped with the words FIT TO WORK, proves that Fantonial was medically Respondent was made to undergo a medical examination at the Christian Medical Clinic, which
fit to leave Manila on January 17 to join the vessel M/V AUK in Germany. The Affidavit was petitioners accredited medical clinic. Respondent was issued a Medical Certificate[3] dated
of Dr. Lyn dela Cruz-De Leon that Fantonial was declared fit to work only on January January 17, 2000, which certificate had the phrase FIT TO WORK stamped on its lower and upper
21 cannot overcome the evidence in the Medical Certificate dated January 17, which portion.
already stated that respondent had Class-B Non-Infectious Hepatitis-B, and that he was
fit to work. At about 3:30 p.m. of January 17, 2000, respondent, after having undergone the pre-departure
orientation seminar and being equipped with the necessary requirements and documents for
travel, went to the Ninoy Aquino International Airport upon instruction of
petitioners. Petitioners told respondent that he would be departing on that day, and that a SEC 2. COMMENCEMENT/DURATION OF CONTRACT
liaison officer would be delivering his plane ticket to him. At about 4:00 p.m., petitioners liaison A. The employment contract between the employer and the seafarer shall commence upon
officer met respondent at the airport and told him that he could not leave on that day due to actual departure of the seafarer from the airport or seaport in the point of hire and with a
some defects in his medical certificate. The liaison officer instructed respondent to return to the POEA approved contract. It shall be effective until the seafarers date of arrival at the point of
Christian Medical Clinic. hire upon termination of his employment pursuant to Section 18 of this Contract.

Respondent went back to the Christian Medical Clinic the next day, and he was told by the Petitioners asserted that since respondent was not yet declared fit to work on January 17, 2000,
examining physician, Dr. Lyn dela Cruz-De Leon, that there was nothing wrong or irregular with he was not able to leave on the scheduled date of his flight to Germany to join the vessel. With
his medical certificate. his non-departure, the employment contract was not commenced; hence, there is no illegal
dismissal to speak of. Petitioners prayed for the dismissal of the complaint.
Respondent went to petitioners office for an explanation, but he was merely told to wait for their
call, as he was being lined-up for a flight to the ship's next port of call. However, respondent LABOR ARBITER DECISION
never got a call from petitioners. On September 25, 2000, Labor Arbiter Ernesto F. Carreon rendered a Decision[7] in favor of
respondent. The pertinent portion of the decision reads:
On May 16, 2000, respondent filed a complaint against petitioners for illegal dismissal, payment
of salaries for the unexpired portion of the employment contract and for the award of moral, Unarguably, the complainant and respondents have already executed a contract of
exemplary, and actual damages as well as attorneys fees before the Regional Arbitration Branch employment which was duly approved by the POEA. There is nothing left for the validity and
No. 7 of the NLRC in Cebu City.[4] enforceability of the contract except compliance with what are agreed upon therein and to all
their consequences. Under the contract of employment, the respondents are under obligation
In their Position Paper,[5] petitioners stated that to comply with the standard requirements that to employ the complainant on board M/V AUK for twelve months with a monthly salary of 450
only those who meet the standards of medical fitness have to be sent on board the vessel, US$ and 220 US$ allowance. The respondents failed to present plausible reason why they have
respondent was referred to their accredited medical clinic, the Christian Medical Clinic, for pre- to desist from complying with their obligation under the contract. The allegation of the
employment medical examination on January 17, 2000, the same day when respondent was respondents that the complainant was unfit to work is ludicrous. Firstly, the respondents'
supposed to fly to Germany to join the vessel. Unfortunately, respondent was not declared fit to accredited medical clinic had issued a medical certificate showing that the complainant was fit
work on January 17, 2000 due to some medical problems. to work. Secondly, if the complainant was not fit to work, a contract of employment would not
have been executed and approved by the POEA.
Petitioners submitted the Affidavit[6] of Dr. Lyn dela Cruz-De Leon, stating that the said doctor
examined respondent on January 17, 2000; that physical and laboratory results were all within We are not also swayed by the argument of the respondents that since the complainant did
normal limits except for the finding, after chest x-ray, of Borderline Heart Size, and that not actually depart from Manila his contract of employment can be withdrawn because he has
respondent was positive to Hepatitis B on screening; that respondent underwent ECG to check not yet commenced his employment. The commencement of the employment is not one of
if he had any heart problem, and the result showed left axis deviation. Dr. De Leon stated that those requirements in order to make the contract of employment consummated and
she requested for a Hepatitis profile, which was done on January 18, 2000; that on January 20, enforceable between the parties, but only as a gauge for the payment of salary. In this case,
2000, the result of the Hepatitis profile showed non-infectious Hepatitis B. Further, Dr. De Leon while it is true that the complainant is not yet entitled to the payment of wages because then
stated that respondent was declared fit to work only on January 21, 2000; however, the date of his employment has not yet commenced, nevertheless, the same did not relieve the
the Medical Certificate was January 17, 2000, which was the date when she started to examine respondents from fulfilling their obligation by unilaterally revoking the contract as the same
the patient per standard operating procedure. amounted to pre-termination of the contract without just or authorized cause perforce, we
rule to be constitutive of illegal dismissal.
Petitioners argued that since respondent was declared fit to work only on January 21, 2000, he
could not join the vessel anymore as it had left the port in Germany. Respondent was advised to Anent our finding of illegal dismissal, we condemn the respondent corporation to pay the
wait for the next vacancy for boatswain, but he failed to report to petitioners office, and he gave complainant three (3) months salary and the refund of his placement fee, including
them an incorrect telephone number. During the mandatory conference/conciliation stage of documentation and other actual expenses, which we fixed at one month pay.
this case, petitioners offered respondent to join one of their vessels, but he refused.
The granted claims are computed as follows:
Petitioners further argued that they cannot be held liable for illegal dismissal as the contract of
employment had not yet commenced based on Section 2 of the Standard Terms and Conditions US$670 x 4 months US$ 2,680.00
Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels (POEA
Memorandum Circular No. 055-96), which states:
WHEREFORE, premises considered, judgment is hereby rendered ordering the respondent amounts of P30,000.00 and P10,000.00 as moral and exemplary damages, respectively, to the
Bright Maritime Corporation to pay the complainant Ricardo Fantonial the peso equivalent at petitioner.[12]
the time of actual payment of US$ 2,680.00.
The Court of Appeals held that the NLRC, Fourth Division, acted with grave abuse of discretion
The other claims and the case against respondent Desiree P. Tenorio are dismissed for lack of in reversing the decision of the Labor Arbiter who found that respondent was illegally
merit.[8] dismissed. It agreed with the Labor Arbiter that the unilateral revocation of the employment
contract by petitioners amounted to pre-termination of the said contract without just or
Petitioners appealed the decision of the Labor Arbiter to the NLRC. authorized cause.

On May 31, 2001, the NLRC, Fourth Division, rendered a Decision[9] reversing the decision of the The Court of Appeals held that the contract of employment between petitioners and respondent
Labor Arbiter. The dispositive portion of the NLRC decision reads: had already been perfected and even approved by the POEA. There was no valid and justifiable
reason for petitioners to withhold the departure of respondent on January 17, 2000. It found
WHEREFORE, premises considered, the decision of Labor Arbiter Ernesto F. Carreon, dated 25 petitioners argument that respondent was not fit to work on the said date as preposterous, since
September 2000, is SET ASIDE and a new one is entered DISMISSING the complaint of the the medical certificate issued by petitioners accredited medical clinic showed that respondent
complainant for lack of merit. SO ORDERED.[10] was already fit to work on the said date. The Court of Appeals stated, thus:

Private respondent's contention, which was contained in the affidavit of Dr. Lyn dela Cruz-De
The NLRC held that the affidavit of Dr. Lyn dela Cruz-De Leon proved that respondent was Leon, that the Hepatitis profile was done only on January 18, 2000 and was concluded on
declared fit to work only on January 21, 2000, when the vessel was no longer at the port of January 20, 2000, is of dubious merit. For how could the said examining doctor place in the
Germany. Hence, respondent’s failure to depart on January 17, 2000 to join the vessel M/V AUK medical certificate dated January 17, 2000 the words "CLASS-B NON-Infectious
in Germany was due to respondent’s health. The NLRC stated that as a recruitment agency, Hepatitis" (Rollo, p. 17) if she had not conducted the hepatitis profile? Would the private
petitioner BMC has to protect its name and goodwill, so that it must ensure that an applicant for respondent have us believe that its accredited physician would fabricate medical findings?
employment abroad is both technically equipped and physically fit because a labor contract
affects public interest. It is obvious, therefore, that the petitioner had been fit to work on January 17, 2000 and he
should have been able to leave for Germany to meet with the vessel M/V AUK, had it not been
Moreover, the NLRC stated that the Labor Arbiters decision ordering petitioners to refund for the unilateral act by private respondent of preventing him from leaving. The private
respondents placement fee and other actual expenses, which was fixed at one month pay in the respondent was merely grasping at straws in attacking the medical condition of the petitioner
amount of US$670.00, does not have any bases in law, because in the deployment of seafarers, just so it can justify its act in preventing petitioner from leaving for abroad.[13]
the manning agency does not ask the applicant for a placement fee. Hence, respondent is not
entitled to the said amount. The Court of Appeals held that petitioners act of preventing respondent from leaving for
Germany was tainted with bad faith, and that petitioners were also liable to respondent for
Respondent filed a motion for reconsideration of the NLRC decision, which motion was denied in moral and exemplary damages.
a Resolution[11] dated July 23, 2001. Respondent filed a petition for certiorari before the Court of
Appeals, alleging that the NLRC committed grave abuse of discretion in rendering the Decision Thereafter, petitioners filed this petition raising the following issues:
dated May 31, 2001and the Resolution dated July 23, 2001.
I WHETHER OR NOT THE HONORABLE APPELLATE COURT COMMITTED A SERIOUS
On March 12, 2002, respondents counsel filed a Manifestation with Motion for Substitution of ERROR AND GRAVE ABUSE OF DISCRETION WHEN IT HELD THE PETITIONERS LIABLE
Parties due to the death of respondent on November 15, 2001, which motion was granted by FOR ILLEGALLY TERMINATING THE PRIVATE RESPONDENT FROM HIS EMPLOYMENT.
the Court of Appeals.
II WHETHER OR NOT THE HONORABLE APPELLATE COURT COMMITTED SERIOUS ERROR
On October 25, 2004, the Court of Appeals rendered a Decision, the dispositive portion of which AND GRAVE ABUSE OF DISCRETION IN SETTING ASIDE THE OVERWHELMING EVIDENCE
reads: SHOWING THAT THE PRIVATE RESPONDENT FAILED TO COMPLY WITH THE
REQUIREMENTS SET BY THE POEA RULES REGARDING FITNESS FOR WORK.

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us REVERSING III WHETHER OR NOT THE HONORABLE APPELLATE COURT SERIOUSLY ERRED AND
and SETTING ASIDE the May 31, 2001 Decision and the July 23, 2001 Resolution of the NLRC, COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT AWARDED MONETARY BENEFITS
Fourth Division, and REINSTATING the September 25, 2000 Decision of the Labor Arbiter with TO THE PRIVATE RESPONDENT DESPITE THE PROVISION OF THE POEA [STANDARD
the modification that the placement fee and other expenses equivalent to one (1) month salary EMPLOYMENT CONTRACT] TO THE CONTRARY.
is deleted and that the private respondent Bright Maritime Corporation must also pay the
IV WHETHER OR NOT THE HONORABLE APPELLATE COURT COMMITTED SERIOUS persuade as it goes against logic and the chronological recording of medical procedures. The
ERROR WITH REGARD TO ITS FINDINGS OF FACTS, WHICH, IF NOT CORRECTED, WOULD Medical Certificate submitted as documentary evidence[18] is proof of its contents, including the
CERTAINLY CAUSE GRAVE OR IRREPARABLE DAMAGE OR INJURY TO THE date thereof which states that respondent was already declared fit to work on January 17, 2000,
PETITIONERS.[14] the date of his scheduled deployment.

The general rule that petitions for review only allow the review of errors of law by this Court is Next, petitioners contend that respondents employment contract was not perfected pursuant to
not ironclad.[15] Where the issue is shrouded by a conflict of factual perceptions by the lower the POEA Standard Employment Contract, which provides:
court or the lower administrative body, such as the NLRC in this case, this Court is constrained to
review the factual findings of the Court of Appeals.[16] SEC 2. COMMENCEMENT/DURATION OF CONTRACT
A. The employment contract between the employer and the seafarer shall commence
Petitioners contend that the Court of Appeals erred in doubting the Affidavit of Dr. Lyn dela Cruz- upon actual departure of the seafarer from the airport or seaport in the point of hire and
De Leon, which affidavit stated that the Hepatitis profile of respondent was done only on January with a POEA approved contract. It shall be effective until the seafarers date of arrival at the
18, 2000 and was concluded on January 20, 2000. Petitioners stated that they had no intention point of hire upon termination of his employment pursuant to Section 18 of this Contract.[19]
to fabricate or mislead the appellate court and the Labor Arbiter, but they had to explain the
circumstances that transpired in the conduct of the medical examination. Petitioners reiterated Petitioners argue that, as ruled by the NLRC, since respondent did not actually depart from the
that the medical examination was conducted on January 17, 2000 and the result was released on Ninoy Aquino International Airport in Manila, no employer-employee relationship existed
January 20, 2000. As explained by Dr. Lyn dela Cruz-De Leon, the date January 17, 2000 was between respondent and petitioners principal, Ranger Marine S.A., hence, there is no illegal
written on the medical examination certificate because it was the day when respondent was dismissal to speak of, so that the award of damages must be set aside.
referred and initially examined by her. The medical examination certificate was dated January Petitioners assert that they did not conceal any information from respondent related to his
17, 2000 not for any reason, but in accordance with a generally accepted medical practice, which contract of employment, from his initial application until the release of the result of his medical
was not controverted by respondent. examination. They even tried to communicate with respondent for another shipboard
assignment even after his failed deployment, which ruled out bad faith. They pray that
Petitioners assert that respondents failure to join the vessel on January 17, 2000 should not be respondents complaint be dismissed for lack of merit.
attributed to it for it was a direct consequence of the delay in the release of the medical report.
Respondent was not yet declared fit to work at the time when he was supposed to be deployed Petitioners argument is partly meritorious.
on January 17, 2000, as instructed by petitioners principal. Respondents fitness to work is a
condition sine qua non for purposes of deploying an overseas contract worker. Since respondent SC RE: NO ER-EE RELATIONSHIP YET
failed to qualify on the date designated by the principal for his deployment, petitioners had to An employment contract, like any other contract, is perfected at the moment (1) the parties come
find a qualified replacement considering the nature of the shipping business where delay in the to agree upon its terms; and (2) concur in the essential elements thereof: (a) consent of the
departure of the vessel is synonymous to demurrage/damages on the part of the principal and contracting parties, (b) object certain which is the subject matter of the contract, and (c) cause
on the vessels charterer. Without a clean bill of health, the contract of employment cannot be of the obligation.[20] The object of the contract was the rendition of service by respondent on
considered to have been perfected as it is wanting of an important requisite. board the vessel for which service he would be paid the salary agreed upon.

Based on the foregoing argument of petitioners, the first issue to be resolved is whether Hence, in this case, the employment contract was perfected on January 15, 2000 when it was
petitioners reason for preventing respondent from leaving Manila and joining the vessel M/V signed by the parties, respondent and petitioners, who entered into the contract in behalf of
AUK in Germany on January 17, 2000 is valid. their principal, Ranger Marine S.A., thereby signifying their consent to the terms and conditions
of employment embodied in the contract, and the contract was approved by the POEA on January
SC RE: FIT FOR WORK 17, 2000. However, the employment contract did not commence, since petitioners did not allow
The Court rules in the negative. respondent to leave on January 17, 2000 to embark the vessel M/V AUK in Germany on the
ground that he was not yet declared fit to work on the day of departure, although his Medical
The Court has carefully reviewed the records of the case, and agrees with the Court of Appeals Certificate dated January 17, 2000 proved that respondent was fit to work.
that respondents Medical Certificate[17] dated January 17, 2000, stamped with the words FIT TO
WORK, proves that respondent was medically fit to leave Manila on January 17, 2000 to join the In Santiago v. CF Sharp Crew Management, Inc.,[21] the Court held that the employment contract
vessel M/V AUK in Germany. The Affidavit of Dr. Lyn dela Cruz-De Leon that respondent was did not commence when the petitioner therein, a hired seaman, was not able to depart from the
declared fit to work only on January 21, 2000 cannot overcome the evidence in the Medical airport or seaport in the point of hire; thus, no employer-employee relationship was created
Certificate dated January 17, 2000, which already stated that respondent had Class-B Non- between the parties.
Infectious Hepatitis-B, and that he was fit to work. The explanation given by Dr. Lyn dela Cruz-De
Leon in her affidavit that the Medical Certificate was dated January 17, 2000, since it carries the Nevertheless, even before the start of any employer-employee relationship, contemporaneous
date when they started to examine the patient per standard operating procedure, does not with the perfection of the employment contract was the birth of certain rights and obligations,
the breach of which may give rise to a cause of action against the erring party.[22] If the reverse
happened, that is, the seafarer failed or refused to be deployed as agreed upon, he would be SO ORDERED.
liable for damages.[23]

The Court agrees with the NLRC that a recruitment agency, like petitioner BMC, must ensure that
an applicant for employment abroad is technically equipped and physically fit because a labor
contract affects public interest. Nevertheless, in this case, petitioners failed to prove with
substantial evidence that they had a valid ground to prevent respondent from leaving on the
scheduled date of his deployment. While the POEA Standard Contract must be recognized and
respected, neither the manning agent nor the employer can simply prevent a seafarer from
being deployed without a valid reason.[24]

Petitioners act of preventing respondent from leaving and complying with his contract of
employment constitutes breach of contract for which petitioner BMC is liable for actual
damages to respondent for the loss of one-year salary as provided in the contract.[25] The
monthly salary stipulated in the contract is US$670, inclusive of allowance.

The Court upholds the award of moral damages in the amount of P30,000.00, as the Court
of Appeals correctly found petitioners act was tainted with bad faith, [26]considering that
respondents Medical Certificate stated that he was fit to work on the day of his scheduled
departure, yet he was not allowed to leave allegedly for medical reasons.

Further, the Court agrees with the Court of Appeals that petitioner BMC is liable to respondent
for exemplary damages,[27] which are imposed by way of example or correction for the public
good in view of petitioners act of preventing respondent from being deployed on the ground
that he was not yet declared fit to work on the date of his departure, despite evidence to the
contrary. Such act, if tolerated, would prejudice the employment opportunities of our
seafarers who are qualified to be deployed, but prevented to do so by a manning agency for
unjustified reasons. Exemplary damages are imposed not to enrich one party or impoverish
another, but to serve as a deterrent against or as a negative incentive to curb socially
deleterious actions.[28] In this case, petitioner should be held liable to respondent for
exemplary damages in the amount of P50,000.00,[29]following the recent case of Claudio S. Yap
v. Thenamaris Ships Management, et al.,[30] instead of P10,000.00

The Court also holds that respondent is entitled to attorneys fees in the concept of damages and
expenses of litigation.[31] Attorney's fees are recoverable when the defendant's act or omission
has compelled the plaintiff to incur expenses to protect his interest. [32] Petitioners failure to
deploy respondent based on an unjustified ground forced respondent to file this case, warranting
the award of attorneys fees equivalent to ten percent (10%) of the recoverable amount.[33]

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No.
67571, dated October 25, 2004, is AFFIRMED with modification. Petitioner Bright Maritime
Corporation is hereby ORDERED to pay respondent Ricardo B. Fantonial actual damages in the
amount of the peso equivalent of US$8,040.00, representing his salary for one year under the
contract; moral damages in the amount Thirty Thousand Pesos (P30,000.00); exemplary damages
that is increased from Ten Thousand Pesos (P10,000.00) to Fifty Thousand Pesos (P50,000.00),
and attorneys fees equivalent to ten percent (10%) of the recoverable amount.

Costs against petitioners.

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